I have received Rs 56 lac fixed deposit redemption after my father death. I want to use the about to buy house.It may take 6 month to 1 year. Meantime please advise me how to invest the money for short period of 6 month to 1 year.
Ans: . First of all, receiving Rs.?56 lakhs from your father’s fixed deposit is a significant financial event. You’re making a thoughtful move by not rushing into the property decision. Keeping the funds safe till you finalise your home purchase is very wise.
Let’s now understand how you can manage this amount well for the short term.
Emotional Stability First, Then Financial Action
This money carries emotional value too
Decisions should respect both heart and logic
Take time to grieve and settle emotions
Only then, act thoughtfully on this corpus
Avoid rushing into quick investments
This balance helps protect your peace and your capital.
Time Frame of Investment Clearly Stated
You want to buy a house
Likely in 6 months to 1 year
This is a short-term investment window
In short-term, safety is priority
Not returns, but capital preservation comes first
So, your investment should be low-risk and highly liquid.
Avoid High Risk Options Immediately
No equity funds, not even balanced funds
No options, futures, or direct equity
Avoid index funds—they follow the market without downside protection
Actively managed debt funds offer safer management
Avoid investing in direct funds on your own
Without expert support, decisions can go wrong
You don’t need volatility or uncertainty now.
Purpose of This Investment Must Guide Decision
This money is meant for home
Don’t mix it with other goals
Don’t lend this amount to anyone
Don’t lock it in long-term instruments
Don’t take tax-saving investment decisions here
Focus only on preservation and quick access
A clear purpose gives your investment direction and boundary.
Options for Parking the Funds Safely
Here are suitable low-risk, short-term options:
Ultra short-term debt funds
Suitable for 3 to 12 months
Low risk and better returns than savings
Very low volatility
Ideal if you need liquidity after 6 months
Low-duration mutual funds
Slightly better returns than FDs
Good for capital safety
Invest through regular plan via Certified Financial Planner
Liquid mutual funds
Extremely safe
Suitable for 1 to 6 months
Withdrawals processed in 24 hours
Useful if house booking is expected anytime soon
Bank fixed deposits (short term)
For very conservative part of capital
Park in 3–6 month FD
Stagger multiple FDs to break when needed
Sweep-in accounts or auto FD
Offers liquidity like savings
Gives FD-like returns on idle balances
Not ideal for large amounts
Use only for Rs.?2–5 lakhs portion
Keep mix simple, safe, and liquid.
How to Allocate the Rs.?56 Lakhs Properly
Here is a structured approach:
Rs.?20 lakhs – ultra short-term fund
Rs.?20 lakhs – low duration fund
Rs.?10 lakhs – liquid fund
Rs.?6 lakhs – bank FDs (staggered in 3 parts)
This gives you safety, liquidity, and mild returns
Revisit every 2 months with your CFP for adjustments.
Taxation Considerations
These are all debt instruments
If held less than 3 years, taxed per your slab
So, if you're in 20% tax slab, gains are taxed at 20%
No need to worry about long-term capital gain rules
Short-term funds offer better liquidity with taxable income
Withdraw only what is required, to avoid extra tax.
Maintain Separate Account for This Goal
Open a new savings account for home investment
Track only this Rs.?56 lakhs from that account
Don’t mix it with salary or daily expenses
Use the account for only home-related payments
This helps manage transactions better and avoid misuse.
Create a Digital Folder for Property Planning
Start researching properties passively
Make a folder for property papers, notes, contacts
Also track the movement of this Rs.?56 lakhs
Maintain basic Excel or written log
Record every transaction and interest earned
This gives you financial discipline and awareness.
Avoid Emotional Decisions and Peer Pressure
Don’t rush because relatives or friends push you
Don’t invest just because someone else did
Don’t go for real estate investments now unless house is finalised
House is a personal choice, not just an investment
Keep your vision and purpose clear.
Regular Review Every Month
Monitor your funds monthly
Check liquid fund NAV, returns
Track fund performance via MFD or CFP
Don’t keep all money in one place
Split between mutual funds and short FDs
Rebalancing is not needed here. But tracking is still essential.
Don’t Use This Corpus for Other Goals
Not for business
Not for education
Not for long-term SIPs
Not for gifting or lending
Keep this amount 100% focused on house purchase.
Liquidity is Non-Negotiable
Your investment must allow exit within 1–2 days
Emergency situations might arise
All selected products should be easily withdrawable
That’s why liquid and short-term funds fit best
This ensures money is ready when you need it.
Role of a Certified Financial Planner (CFP)
Choose regular mutual fund plans through CFP
Direct funds lack expert monitoring
CFP tracks market events and manages risks
Offers human touch and strategic rebalancing
Helps you remain calm during rate fluctuations
For short-term planning, this guidance is vital.
Future House Purchase Planning Tips
When ready to purchase, shift liquid funds gradually
Pay token amount from liquid fund
Move rest step-by-step during registration
Maintain Rs.?5–10 lakhs till last stage for surprises
Avoid locking full amount in builder advance
You stay in control by releasing money in steps.
If Delay Happens Beyond 1 Year
If house booking delays beyond 1 year
Shift from liquid funds to corporate bond or medium-duration fund
But only if 100% confident about extended timeline
Reconfirm with CFP before this shift
Flexibility should match your actual plan updates.
Finally
You have received a large amount from your father’s savings.
It’s a responsibility and an opportunity.
You are already doing the right thing by not rushing into property.
Short-term investment needs very safe, liquid and low-risk options.
Your Rs.?56 lakhs should be protected with care until home is finalised.
Use ultra short-term, liquid funds, and low-duration funds wisely.
Avoid equity, index funds, and direct market exposure now.
Invest only through regular plans with CFP to preserve capital.
Use the right mix of bank and mutual fund products for liquidity.
Once home is finalised, funds are easily moved to purchase.
Your plan is clear, smart, and already in the right direction.
Just stay focused, review monthly, and take action slowly with clarity.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment